As the first anniversary of the Banking Royal Commission rolls around this week, Australians appear to be embracing neobanks with open arms.
At least that’s according to Xinja, which is today circulating a boastful statement about receiving $100 million worth of deposits less than three weeks after launching its new savings account, called “Stash”.
The digital bank, founded in 2017 by Eric Wilson and Van Le, has been on a tear signing up customers since receiving its full banking license last September, convincing 15,000 Aussies to sign up for its new savings account since early January.
While nine-figure deposits are a drop in the bucket of Australia’s $140 billion financial services sector, some back of-napkin math indicates more than $6 million has been flowing into Xinja’s coffers each day since mid-January.
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Where’s all that dosh coming from, you ask?
“More than half of the deposits have come from Australia’s big four banks, a very strong signal that consumers are keen to embrace digital banking,” Wilson said in a statement on Wednesday.
Digital banking, defined moreso by what it isn’t (i.e. services provided by Australia’s big-four) than what it is, has been tipped for a big year in 2020 as consumers pack up their nest eggs and hit the road in the wake of an annus horribilus of sorts for the likes of Commonwealth Bank, Westpac, ANZ and National Australia Bank.
That means it’s hay time for the startup founders who took a bet on the future of Australian banking several years ago, with Wilson saying on Wednesday there are now more than 23,000 accounts open on Xinja, capping off a period of high growth for the business.
And while customers are saving on average $11,500 in their Xinja accounts, they’re also spending.
Almost $2 million has been spent across more than 165,000 unique transactions on Xinja since its launch last year.
The figures, albeit published by the company without any external verification, are one of the first looks we’ve got into how Australia’s banking landscape is evolving in the wake of a class of neobanks being granted their banking licenses last year.
Alongside Bendigo Bank-backed Up, 86 400 and Volt Bank, Xinja will be hitting the airwaves in the first half of 2020, operating under the relatively safe bet that laundering money for criminals and charging fees to dead customers has left a bad taste in the mouth of consumers.
The message? There’s another option.
“Clearly the big four are rattled,” Wilson said.